Do Anti-Trust Laws Inflate the Prices of Birth Control?

Over at the Examiner, Jennifer Chou brings up the possibility that the high cost of
birth control is partially due to state anti-trust laws. While I agree with her that the cost of birth control is a straining expense (my girlfriend and I split the cost, but the $60 for Ocella or $80 for Yaz – the only birth controls that work for her without debilitating side-effects – can still be difficult to come by), there are two big problems with Chou’s article. First, she misunderstands why some people are (wrongly, ignorantly) against birth control:

"About 20 percent of the country thinks that a female should have [a] baby even if she was raped, it was incest, and she is nine years old (no abortion under any circumstances). One would think that this callous hatred for abortion would in turn translate into a support and love fest for birth control as a preventative measure, but that doesn’t seem to be the case either, as abstinence-only education continues to flourish."

I don’t have to go into too much detail about why this assessment is incorrect in its description of birth control dissent, but generally, those opposed to birth control illogically believe that it is a form of premature abortion. I needn’t go into detail about why this is wrong.

The other problem with Chou’s article is its understanding of anti-trust laws as an explanation for inflated birth control prices:

"Wal-Mart, with Target following its lead, decided to offer one-month supplies of generic birth control at a measly $9 a month. Those of you accustomed to normal birth control prices know that this is incredible and fantastic. However, this plan was quickly quashed by several state anti-trust laws which prohibit the sale of such drugs at below cost. Nine states, including Wisconsin and Minnesota forced Wal-Mart to charge a much higher fee for birth control under the relevant anti-trust statutes."

This viewpoint is short-sighted. Wal-Mart’s strategy is to undercut local stores by offering the lowest prices (prices that are impossible for local sellers to match and stay in business) only to raise the prices once the competition has been eliminated. In other words, once the competition disappears, Wal-Mart can then raise the price at their discretion, bringing the price of birth control back to what we’re used to paying now. The goal of anti-trust laws is to prevent this from happening, to help small businesses and foster competition by forcing companies to compete with feasible price points.

Of course, now Wal-Mart can turn its toe in the sand and argue that, shucks, they’re just trying to sell us drugs at affordable prices, if only it weren’t for those darn anti-trust laws. Wal-Mart can turn public sentiment against the very laws that are designed to protect local business and keep big corporations like Wal-Mart from bulldozing small towns to build unsightly box stores.

Any anger at how expensive birth control is (or any other prescription drug, for that matter) should be directed at pharmaceutical companies and insurance companies, not the anti-trust laws that are supposed to protect small businesses.